Co-Packaged Optics (CPO) is emerging as a transformative solution. By integrating optical engines closer to switch ASICs and GPUs through advanced packaging approaches such as 2. According to LightCounting, sales of lasers and photonic integrated circuits for optical transceivers are expected to grow from $2. 9B by 2029, fueled largely by AI data centers. Read on to learn key CPO trends shaping AI systems in 2026 and the challenges designers will need to. It reviews recent advances in CPO technology, tracks emerging packaging approaches, assesses the strategies of leading companies, and provides long term market forecasts. Advanced semiconductor processes such as hybrid bonding and heterogeneous integration are key. Co-packaged optics (CPO) technology, a key enabler for next-generation data center architectures, promises unprecedented bandwidth density and power efficiency by tightly integrating optical engines with switch silicon. This paper explores the evolution of CPO performance from various perspectives, including fan-out wafer level.
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